Times Co. reports loss, notes interest in Sox stake

Executives at The New York Times Co., which posted a first-quarter net loss of $74.5 million, told analysts this morning that negotiations with The Boston Globe's unions were key to cost cutting as advertising revenue plunged 27 percent company-wide in the first three months of the year.

Globe management is engaged in a wide-ranging effort to restructure its cost base, said Times Co. chief executive Janet L. Robinson (right), citing the closing of a printing plant in Billerica and talks aimed at gaining $20 million in savings from the unions. Across the company, executives said they plan to trim $330 million in costs this year.

The Times Co. also said there's been strong interest in buying the company's 17.7 percent stake in New England Sports Ventures, which owns the Boston Red Sox. The company put it up for sale in December. "We are pleased by the response we have seen from prospective buyers," Robinson said. She did not identify any of the potential buyers.

Executives didn't address whether the Times Co. might close the Globe, which it has threatened to do if it couldn't gain significant cost savings. Executives also wouldn't respond to questions about whether the Times Co. might sell the Globe, which it purchased for $1.1 billion in 1993. But Robinson and others made it clear they were taking a hard look at the performance of all of the company's properties.

"As always, we continue to evaluate our assets to see if they are a strategic fit," said James M. Follo, senior vice president and chief financial officer.

Shares of Times Co. stock were down 76 cents, or 12.99 percent, to $5.09 in mid-day trading on the New York Stock Exchange.

Company officials, both in their quarterly earnings report and their conference call with securities analysts, singled out "significant losses at the New England Media Group" as a major factor in the Times Co.'s weak performance in three months ending March 31. The company doesn't break out earnings or losses for the group, which includes the Globe and the Worcester Telegram & Gazette.

While every segment of the company's business was battered by the steep advertising decline in the first quarter, the New England group, dominated by the Globe, turned in the weakest performance. Advertising revenue tumbled 31.6 percent for the New England group.

Overall ad revenue fell 27.3 percent at the New York Times Media Group, which includes the New York Times newspaper and the International Herald Tribune. It fell 29.3 percent at the Regional Media Group, which includes smaller newspapers mostly in the southeastern United States.

Classified ad revenue, historically a cash cow for the Globe and the Telegram & Gazette, dropped by 45.1 percent across the company in the quarter.

Internet revenue, from the company's newspaper websites and About.com unit, fell 6 percent to $67.6 million, as the slowdown in classified advertising sales continues to spread to online operations. Those operations now account for 12.8 percent of Times Co. revenue.

The first-quarter loss of 52 cents a share was on revenues of $609 million, compared with a net loss of $355,000 on revenues of $747.9 million in the year-ago period. The quarterly decline in revenue was 19 percent.

Financial analysts had expected a quarterly loss of only 4 cents a share. But the first-quarter numbers included substantial one-time accounting charges for depreciating assets, the writedown of leases from a shuttered newsstand distribution business in New York, and severance costs, mostly in New England. Without the non-recurring items, the per-share loss would have been 35 cents.

Today's bleak financial report comes as Times Co. officials resume negotiations with labor unions at the Globe. The company earlier this month threatened to close the Boston newspaper if it could not reach the $20 million in savings from unions, telling labor leaders that the Globe lost $50 million last year and is projected to lose $85 million this year.

Robinson said the economic challenges intensified in the first quarter. The advertising decline for its overall News Media Group, which includes all the company's newspapers and their websites, was 28.4 percent in the first quarter, compared to an 18.4 percent decline in the fourth quarter of 2008.

"At this time, and it is early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first," Robinson said. "In time, however, we believe that the economy will grow and the advertising market will improve. While we are looking forward to that day, we are not waiting for it. We have moved aggressively to restructure our cost base in line with our revenues."

When advertising does improve, Robinson said, "we believe we will be well positioned to meet the needs of the marketplace and to benefit from our restructured cost base."
(By Robert Weisman, Globe staff. File photo of Robinson, Pat Greenhouse, Globe staff)